2023 Forecast for Worldwide IT Spending Lowered for Fifth Consecutive Month Due to Weakening Economy

Worldwide IT spending growth, technology investments are showing the impact of a weakening economy, leading to a reduction in IDC’s 2023 forecast for the fifth consecutive month. IDC projects a 4.4% growth in constant currency to reach $3.25 trillion in IT spending this year, slightly down from 4.5% in the previous month’s forecast. This represents a significant swing from a 6.0% growth forecast in October 2022.

While technology spending remains resilient, rising interest rates are impacting capital spending, resulting in a moderate pullback in some areas of IT spending since Q4 2022. IDC has reduced its expectations for additional hardware categories, including servers, wearable devices, and peripherals, and for on-premise infrastructure investments by enterprise buyers. However, cloud and service provider deployments remain more resilient overall.

According to Stephen Minton, Vice President in IDC’s Data & Analytics research group, the consumer markets are the most impacted, with consumer IT spending forecast to decline by 2% this year. This marks a second consecutive year of declining consumer tech spending, a significant change from 2021’s 18% growth. However, enterprise demand for cloud and digital transformation remains strong despite economic headwinds.

IDC’s Worldwide Black Book forecast for March 2023 update reveals that direct IT spending is expected to grow by 6.4% overall in 2023, while indirect spending through channel providers will increase by just 2.5%, as credit tightening affects smaller businesses and consumers in their ability to fund technology investments.

Although cloud infrastructure, software, and services are growing more slowly than a year ago, they continue to account for a larger share of total IT spending and reinforce the general sense of resilience that the industry still enjoys. Meanwhile, resellers that still generate significant revenue from on-premise infrastructure and PCs are facing difficult market conditions this year.